Insurance Regulator has imposed a penalty for Rs. 5 lacs on Reliance General Insurance for not paying the claim amount directly to the insured. Reliance General Insurance settled the claim through a Third Party Administrator (TPA) which resulted in violation of norms on standardization of health insurance.
As per norms on standardization of health insurance, general insurance companies have to pay the claim amount directly to the insured. The insurer can directly transfer funds through electronic means to the policyholders or by cheque/demand draft (if insured demands).
As per IRDAI, the amount against the claims to be paid to the network providers/policyholders is still routed through the TPAs. This is a clear violation of the referred regulation. Thus, the authority imposes a penalty of Rs 5 lakh on the insurer.
IRDAI fines Reliance General Insurance for paying through TPA
Last Updated: Apr 15, 2015 | 754 Views